Greenbrier Cos. cuts loss in second quarter

Lake Oswego, Ore.-based Greenbrier Cos. Wednesday said it had reduced its loss during its fiscal second quarter ended Feb. 28, largely through cost-cutting measures.

The company lost $4.8 million, or 28 cents per share, improving from its losses in the fiscal second quarter of 2009, when it lost $7.5 million, or 45 cents per share. Analysts had anticipated a loss of 23 cents per share.

Revenue declined 30% to $200 million during the quarter compared with year-ago figures, but the company compensated by reducing its spending 35%. Manufacturing revenue dropped to $88.1 million from $145.6 million, refurbishment and parts revenue fell to $94.3 million from $121.7 million, and leasing and service revenue declined to $17.6 million from $19.9 million.

Greenbrier delivered 800 new railcar units in the second quarter, down from 1,300 a year earlier. At the end of February it had a backlog of 4,400 units worth a total of $380 million, down from 15,100 units valued at $1.31 billion a year ago.

“As anticipated, the second quarter was weaker than our first quarter,” said President and CEO William A. Furman “Similar to prior years, we expect that the second half of the year will be significantly stronger than the first half.”

The company said it saw signs of resurgent activity in the freight rail marketplace, and said it plans to restart new railcar production at its Concarril plant in Sahagun, Mexico, during the fourth quarter.

Said Furman, “We are currently experiencing early signs of increased activity and demand in all of our business segments. While overall visibility remains limited, we are seeing improvements in railcar loadings, declining railroad velocity, and declines in the quantity of railcars in storage. Assuming these trends continue, we anticipate a positive impact on each of our business segments in the second half of 2010.”

Though expressing some caution with the pace of the company’srecovery, KeyBanc Capital Markets Inc. analyst Steve Barger believes Greenbrieris on track. “The weaker than expected quarter does not derail our positiverailcar and GBX thesis,” Barger wrote, adding that Keybanc is “maintaining our ‘Buy’rating” for the company’s stock.

Barger added, “We are encouraged that GBX plans to restartrailcar production in its Concarril facility (Mexico) beginning in fiscal 4Q10.In our view, this suggests order inquiries have likely accelerated recently,providing GBX with ample visibility to restart production.”

Greenbrier also announced Wednesday that it had filed a $300 million universal shelf registration statement on Form S-3 with the Securities and Exchange Commission to offer $300 million in stock. But “we currently have no plans to offer or sell securities under this registration statement,” stated Mark Rittenbaum, executive vice president and chief financial officer. If approved by the SEC, the shelf registration statement would remaineffective for three years.